$HIMS

The wind has turned against HIMS. Compounded GLP-1 products, which sit at the center of the company’s growth story, are no longer just a gray-area debate, they are now facing a concrete regulatory barrier. Especially with the FDA hardening its tone and bringing the Department of Justice (DoJ) into the process, the risk parameters have completely changed.
Novo Nordisk’s legal moves, and especially the fact that oral formulations are being treated as a red line, have increased the pressure on the company. The fact that HIMS had to stop oral GLP-1 sales is also operational proof of this pressure. Losing this segment, which makes up a quarter of revenues (25%), doesn’t just punch a hole in revenue, it also disrupts the company’s aggressive growth narrative. A segment that represents 25% of revenue and is the engine of growth is no longer just slowing, it is also under an existential legal threat.
It’s not just revenue loss on the table, there are also potential legal defense costs. In the current environment of uncertainty, no matter how attractive the valuation looks on paper, entering the stock before the regulatory fog clears could be falling into a value trap
The chart has broken down badly ❗️